Pratte, J:—The only issue on this appeal is whether the Trial Division was right in holding that, in computing his capital gain from the disposition of gold bullion, the respondent could deduct, as part of his cost, interest on the unpaid portion of the price of the bullion and safe keeping charges that he had incurred in respect of the period during which he had held the bullion.
In deciding that those interest and charges could be deducted, the learned trial judge did not rely on any provision of the Income Tax Act but rather on what, in his view, would have been the intention of Parliament had it given consideration to that question. We cannot agree with that approach.
In trying to support that judgment, counsel for the respondent argued in substance that capital gain should be computed according to the same rules as income from a business or property. That argument, while attractive, does not find any support in the Income Tax Act, which provides special rules for the computation of capital gain. Under those rules, as they are found in subparagraph 40(l)(c)(i) [sic] and section 54, the interest and safe keeping charges here in question could be deductible only if they were part of the cost of the bullion. In our opinion, they were not. As we understand it, the word “cost” in those sections means the price that the taxpayer gave up in order to get the asset; it does not include any expense that he may have incurred in order to put himself in a position to pay that price or to keep the property afterwards.*
The appeal will therefore be allowed with costs, the judgment of the Trial Division will be set aside, the respondent’s action will be dismissed with costs.
Appeal allowed.